‘Buy American’ clause could lead to trade war: CEA

AFP , WASHINGTON

The Consumer Electronics Association (CEA) warned on Friday that “Buy American” provisions in the economic stimulus bill could make the US vulnerable to a trade war.

“The ‘Buy American’ provisions in the stimulus bill will signal to our trading partners around the world that the United States is returning to the bad old days of protectionism and economic nationalism,” CEA president Gary Shapiro said in a statement.

“Rather than stimulate the American economy, these provisions will lead to retaliation from abroad and cost precious jobs in the United States,” said the head of the association representing about 2,200 electronics companies.

“The promise that the ‘Buy American’ provisions keep with the letter of World Trade Organization commitments is a meaningless gesture — it contradicts recent statements by both President [Barack] Obama and G20 leaders to avoid protectionism, which exacerbate the global economic crisis,” Shapiro said.

“If we close our borders to international trade and artificially prop up our own industries, we deepen the global recession and further make ourselves vulnerable to a trade war,” he added.

The US House of Representatives on Friday passed a US$787 billion stimulus package and the Senate was poised to follow suit.

Canadian Prime Minister Stephen Harper was among those expressing concern on Friday over provisions in the bill that would require the use of US iron, steel and manufactured goods in public works projects funded by the bill.